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The news offers new data points for investors who are hoping
Amazon will post a profit for the fourth quarter when it
announces results in the coming weeks. Seattle-based Amazon,
known for its roller coaster results in years past, has forecast
that operating income would range from nothing to $1.25 billion.
Amazon, the world's largest online retailer, has said the 2016
holiday was its best-ever shopping season. However, high
spending on warehouses and video production are expected to drag
on profits.
More sellers are paying the company to store, pack and ship
their goods through the Fulfillment by Amazon service. Amazon
more than doubled the items it delivered for other sellers in
2016 from the year prior to exceed two billion, a spokesman
said.
Active sellers using the fulfillment service rose more than 70
percent in the year, Amazon said on Wednesday. It did not
specify the total number of vendors.
Third-party sales were "record-breaking" in 2016, Peter Faricy,
vice president for Amazon Marketplace, said in the statement.
Amazon takes a cut of the proceeds.
Amazon will likely top its profit-margin guidance for the fourth
quarter, Morningstar analyst R.J. Hottovy said in a research
note last week. Price competition seemed subdued in December and
Amazon avoided delivery bottlenecks it experienced in 2015, he
said.
Cyber Monday, a shopping spree four days after Thanksgiving, is
another indicator. Shoppers ordered more than 28 million items
from third-party sellers this year, versus more than 23 million
items on Cyber Monday in 2015, Amazon said.
Amazon is building its own fleet of planes to handle the rise in
orders and supplement shipping that it contracts out to
companies like FedEx Corp <FDX.N> and United Parcel Service Inc
<UPS.N>. Data reviewed by Reuters and interviews with airport
officials show that Amazon has loaded these aircraft with big
but lightweight boxes, helping it dodge fees from cargo carriers
increasingly pricing based on volume rather than weight.
The company does not disclose the revenue it generates from its
Fulfillment by Amazon service. Chief Executive Jeff Bezos has
said that close to 50 percent of the units purchased on Amazon
come from third-party vendors.
Clicks on product advertisements paid for by third-party sellers
grew 150 percent, Amazon said.
(Reporting by Jeffrey Dastin in New York; Editing by Leslie
Adler)
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